03 May Trying to avoid a fight over an inheritance

Q. My mom wants to leave her house to me since I’m the only girl. My brothers may try and contest this in probate court. What can my mom do to be sure I receive ownership of the house upon her death?
— Thinking

A. There are steps your mom can take to decrease the chance of a fight after her death.

First, let’s note that trying to decide how to divide property is a common estate planning challenge.

Some people decide inheritances should be split among the heirs equally, where the same amount is left to each heir, while others split their estate “equitably,” in some other way that is considered fair, said Andrew Novick, a certified financial planner and estate planning attorney with The Investment Connection and Brookner Law Offices in Bridgewater.

“For instance, it may be equitable for a parent with two children to leave more than 50 percent to a child who struggles financially and less than 50 percent to a second child who is financially secure,” Novick said. “Another example could be that a parent wants to leave the family business to the child that works in the business and leave other assets to the other child.”

From your question, it is not clear whether your mother is looking to leave you the house and other assets to your brothers, or if she plans to distribute her assets unevenly.

If the home is valued similarly to whatever other assets she’s leaving your brothers, there may not be much to worry about. But if the house represents most of your mother’s net worth so your brothers’ inheritances will be much smaller, this could certainly create hard feelings.

“Nonetheless, your brothers cannot contest the will simply because they think the inheritance was unfair,” Novick said. “Courts will give a large amount of deference to what your mother thought was fair. After all, the assets are hers to give away.”

In New Jersey, the main reasons to contest a valid will are either because the decedent lacked testamentary capacity or was subject to undue influence. While an attorney is not needed to draft a will, it is a good idea in this case because it can help counter either of these grounds for a contest, Novick said.

He said regarding testamentary capacity, an attorney should test your mother before allowing her to sign the will.

“If there is a question of capacity, the testing will be more rigorous and should certainly involve the attorney keeping good written notes,” he said. “Keeping certain medical records around the time the will is executed, such as a statement from your mother’s doctor indicating that she has mental capacity, can also help.”

Another option would be for your mother to make a video recording that shows her signing the will. This would make it more difficult for your brothers to argue that she did not have mental capacity, Novick said.

He said an attorney can also help remove the appearance of undue influence, but that is a bit more difficult.

For example, if your mother is planning on leaving the house to you and you are also her primary caregiver, your brothers may argue that you took advantage of your position to exert undue influence.

“To minimize this as an issue, you should not be involved when your mother meets with the attorney to discuss drafting the will or when she signs it,” he said. “To be totally safe, you shouldn’t even help her choose an attorney or drive her to the attorney’s office.”

Novick said your mother can also include language in the will explaining why the inheritance is not equal. If your brothers see the reasoning behind her decision and the reasoning is rational, they may be less likely to allege undue influence, he said.

Your mom has another option, Novick said. Although no-contest clauses are frowned upon in New Jersey, including the clause in your mother’s will can still be an effective deterrent to a will challenge.

“A no-contest clause provides that if an heir challenges the will and loses, then he or she will get nothing,” Novick said. “Your mother must leave your brothers enough so that a challenge is not worth the risk of losing the inheritance.”

There’s another planning strategy that could be appropriate.

Your mother could change the deed to her house to a life estate deed, Novick said.

With a life estate deed, your mother becomes the life tenant and you can be named as the remainderman. As life tenant, your mother can live on and use the property for the rest of her life without having to pay rent. At her death, the property automatically passes to you as the remainderman, Novick said.

“A life estate deed can feel like a relief to some people because how the property is addressed after death is not dependent on the will, so the likelihood of the will being challenged is reduced,” he said. “There are some drawbacks to a life estate deed, such as your mother can no longer sell the property without your consent, nor can she change her mind later once the deed is signed.”

Overall, your mother should review her options with a qualified estate planning attorney.

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This story was originally published on May 3, 2019.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.